Results of First Offshore Wind Energy Tender in Germany

With the latest amendment to the German Renewable Energy Sources Act (EEG 2017) Germany has replaced the feed-in tariffs with a competitive tender system for offshore wind energy. On 13 April the German Federal Network Agency (Bundesnetzagentur) announced the results of the first German offshore wind energy tender. Impressively, three offshore wind projects with a total capacity of 1,380 MW won the tender with 0.0 ct/kWh bids and, therefore, will receive no subsidies on top of the wholesale electricity price.

In the first auction round the highest winning bid for an offshore wind energy project is 6.0 ct/kWh and the lowest winning bid is 0.0 ct/kWh. The dramatically low prices reflect the rapid decline in industrial costs, indicating a steep learning curve in the industry and demonstrate that offshore wind energy can be a key cornerstone for Germany’s Energy Transition (Energiewende). The four successful bids sum up to a total capacity of 1,490 MW and therefore, the total auction volume of 1,550 MW was nearly reached. All four winning bids belong to project areas in the North Sea. Two auction rounds will be organised by the German Federal Network Agency for the transitional period from 2021 to 2025. Each of the two tenders have a volume of 1,550 MW. The second tender is scheduled for 1 April 2018.

Therefore, a total of 3,100 MW offshore wind energy capacity will be tendered during the five-year transitional period (2021-2025). The tender volume is 500 MW in 2021 (exclusively to the Baltic Sea) and 500 MW in 2022, plus 700 MW per year during 2023-2025.

There are currently 24 offshore wind farm projects eligible in German waters. The transitional period will be followed by the so-called “central model" from 2026 onwards, during which German authorities will pre-select appropriate offshore wind sites and perform preliminary investigations on them. Developers will bid on the right to develop offshore wind farms on these pre-selected sites. During the central model an annual capacity of 840 MW is foreseen. The first call for tenders under the central model is scheduled on 1 September 2021.